Rickmers Maritime’s third quarter profit plunged 26 percent from a year earlier on lower charter revenue and increased costs, but the Singapore-based trust said its strong cash flow would help it to ride out volatile market conditions.
Net profit fell to $8.2 million from $11.1 million in the third quarter of 2011 as charter revenue declined 5 percent to $36.3 million.
The $1.9 million decline in revenue was due mainly to the daily charter rate for the vessel Kaethe C Rickmers plunging to $7,600 from $23,888 in the corresponding period in 2011.
Dry docking and unscheduled repairs also cut charter revenue from Rickmers’ fleet of 16 containerships.
Vessel operating expenses grew 5 percent to $8.8 million from $8.4 million due to contractual increases in fixed operating charges, higher lubricant fuel prices, and additional insurance and piracy-related costs.
The company, which is affiliated to Hamburg-based Rickmers Group, further deleveraged its balance sheet by repaying $13.1 million of its outstanding bank loans during the quarter, reducing borrowings to $583.6 million. The cash balance stood at $54.4 million as of Sept. 30.
“Despite the difficult economic climate, our business as a tonnage provider to the global liner companies continues to perform well, with our long-term fixed rate time charters ensuring good visibility over future earnings,” CEO Thomas Preben Hansen said. “With secured revenue of $511.5 million through existing charter arrangements, the Trust is able to generate healthy ongoing cash flow to ride out the uncertainties in the market.”
Rickmers’ ships are on long-term, fixed-rate time charters to ocean carriers such as CMA CGM, Hanjin Shipping, Mediterranean Shipping, MOL and Italia Maritima.